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Caterpillar CEO Comes Under Fire Amid Reductions, Tough Industrial Markets

Caterpillar CEO Comes Under Fire Amid Reductions, Tough Industrial Markets

Caterpillar Inc. (NYSE: CAT) shares are up more than 5 percent this week after the company slashed its full-year guidance and announced yet another round of job cuts. Caterpillar is now expecting to earn $3.55 per share in 2016 compared to previous guidance of $3.70.

Doug Kass, president of Seabreeze Partners Management, tweeted this week that he’s had enough of Caterpillar CEO Douglas Oberhelman.

Caterpillar has said that it plans to shut down or consolidate 20 of its plants by the end of 2018. The company has already cut roughly 5,300 jobs and will now be adding on to its 10,000 total planned layoffs. Caterpillar has struggled to stay afloat in one of the most difficult oil & gas environments in recent history, and Oberhelman said this week that he doesn’t expect the industry to improve anytime soon.

“We’re cautious as we enter the second half of the year,” Oberhelman said. “We’re not expecting an upturn in important industries like mining, oil and gas and rail to happen this year.”

Related Link: Oil & Stocks Have Decoupled, But Daily Returns Remain Correlated

Since he took the helm at Caterpillar in 2010, the stock is up 39.2 percent compared to the 110.6 percent gain by the SPDR S&P 500 ETF Trust (NYSE: SPY) in that same time.

Despite the stock’s lagging performance and the more than 10,000 Caterpillar employees that will be losing their jobs, Oberhelman reportedly got a 4.5 percent raise in 2015, taking home $17.9 million in compensation.

Disclosure: the author holds no position in the stocks mentioned.


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